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Auto market is a bright spot for steel in tough times

Keywords: Tags  north american auto sales, General Motors Co., Ford Motor Co., ArcelorMittal USA LLC, Michael Rippey, lightweighting, Great Designs in Steel, Lawrence W. Kavanagh Steel Market Development Institute


In the midst of a global steel glut, one of the bright spots for the domestic industry is that automotive demand remains strong.

Auto sales in North America are on track to exceed 15 million vehicles in 2013, up from 14.5 million last year, which would make it the best year since the bottom fell out of the market during the Great Recession. The Detroit brands are making a strong comeback after the near-death of the American automobile industry in 2009, holding nearly 46 percent of the market. (In contrast, Asian brands have a 45-percent share.)

Replacement demand is driving business: The average used automobile today is 11 years old, and record-low interest rates make buying a new car more appealing. Demand is so strong that the Big Three domestic automakers are forgoing universal summer production shutdowns at many assembly plants. General Motors Co. has said it will schedule maintenance only on an as-needed basis, and Ford Motor Co. expects to compress its usual two-week shutdown to one week at six assembly plants.

Meanwhile, steel remains the preferred material for automakers worldwide. “Steel is the complete package for automotive applications,” Michael Rippey, president and chief executive officer of ArcelorMittal USA LLC, told more than 1,400 attendees at the Great Designs in Steel seminar at Livonia, Mich., in May. “Over the past six years, total automotive steel content has remained at about 60 percent of vehicle weight despite materials competition.”

Rippey and other presenters at the seminarÑwhich brought together North American vehicle manufacturers, tier 1 suppliers, equipment suppliers, the steel industry and academiaÑfocused their attention on advanced steel technologies. Recent research has shown that advanced high-strength steel body structures can be as light as aluminum bodies while meeting increasingly stringent crash performance standards and matching current costs.

Lightweighting has long been the holy grail of the steel industry, given the federal government’s push to achieve fuel mileage standards of 54.5 miles per gallon by 2025. “The (Great Designs in Steel) presentations debunked the misconception that steel is somehow unable to provide the lightweighting benefits of alternative materials,” said Lawrence W. Kavanagh, president of the Steel Market Development Institute (SMDI), which hosted the seminar. “Given its unique chemical properties, steel can be formulated to satisfy vehicle performance, safety and emissions requirements at the lowest cost and environmental impact. Other materials just can’t compete with the package of benefits.”

“Steel’s unique properties are determined by the laws of chemistry and physics,” Rippey said. “And these laws allow for the continuous reinvention of steel and the development of an almost unlimited number of different grades. It’s steel’s unique structure that allows the material to continually improve through development of stronger and more formable grades, which improve its capability to satisfy the complex demands of today’s and tomorrow’s vehicles with lower-weight, affordable solutions.”

Rippey pledged that ArcelorMittal and other SMDI members would accelerate laboratory research to model how steel can be developed by manipulating molecular structures to create new grades that are stronger and more formable than what is available today.

He noted that mass reduction with steel can be achieved at almost no extra cost, while many engineering studies show low-density materials such as aluminum can cost an extra $2.75 for every pound saved. Additionally, manufacturing and assembly with aluminum is 20 to 30 percent more expensive than steel. “And that extra 20- to 30-percent cost does not include a company’s cost to change its infrastructure to manufacture aluminum,” he said. “Because of steel’s dominant role in the auto industry, most manufacturing plants are already equipped with the technology and machines required to process steel. This eliminates the costly retooling necessary to produce and use other materials.”

Louis G. Hector Jr., a technical fellow at GM’s research laboratories in Warren, Mich., outlined at the seminar how the Auto/Steel Partnership is working to develop the next generation of advanced high-strength steel through computation, product design and performance. Hector is leading a GM team that recently was awarded a $6-million U.S. Energy Department grant for the study of integrated computational material engineering (ICME).

“The goal of this project is to develop computational tools that will enable improved steels for lighter-weight, safe and more fuel-efficient vehicles,” Hector said in his presentation. ICME will bring together the best minds in U.S. academia and industry to integrate state-of-the-art, multi-scale computational tools to produce a single ICME model to facilitate the design of lightweight automotive components and to validate those models on actual vehicle components, he said.

Hector noted that recipients of, and key contractors for, the four-year ICME grant include West Chester, Ohio-based AK Steel Corp., Chicago-based ArcelorMittal USA LLC, Charlotte, N.C.-based Nucor Corp., Dearborn, Mich.-based Severstal North America Inc. and Pittsburgh-based U.S. Steel Corp., as well as GM, Ford and Chrysler Group LLC.

He said the grant will fund research into the use of high-speed computers to design multi-phase steel microstructures that achieve desired strength and ductility targets and that can generate constitutive models capable of predicting formability and failure limits of actual components.

Rippey noted that observers of the auto industry have been predicting steel’s demise for more than half a century, quoting from a 1953 article in Cars Magazine: “The day of the passenger car made primarily of iron and steel is on the wane and will give ground to aluminum, magnesium and plastics.” He added, “It wasn’t true then and it certainly isn’t true now.”

He pointed out that the steel industry has doubled “the number of new advanced high-strength steels that help automakers reduce vehicle weight without sacrificing safety, sustainability and affordability in the past 10 years. That’s a notable feat.”

Kavanagh said that real-world events offer “example after example of how the auto and steel industries are accelerating their work to reinvent steel to provide affordable solutions for new vehicle mass reduction and performance targets.” With current research and development, “as well as steel’s unique ability to be continuously reinvented, the material’s role in the future of the automotive industry is hard to dispute.”

WorldAutoSteel’s Cees ten Broek told the seminar that the FutureSteelVehicle (FSV)Ña long-awaited electrified automobileÑcould be in commercial production as early as 2015. The FSV is envisioned to be a fully engineered, steel-intensive design for electrified vehicles that reduce greenhouse gas emissions for their entire life. He said that engineers have managed to reduce body mass for the FSV by more than 39 percent over a benchmark vehicle, nearly 10 percent better than the initial body mass reduction target. The FSV will reduce total life-cycle emissions by about 70 percent over a benchmark vehicle and will meet a broad list of global crash and durability requirements, he said.

WorldAutoSteel is in partnership with the SMDI and its member steel companies. Since the Phase II report on the FSV was announced in 2011, SMDI and WorldAutoSteel have discussed the FSV project with automakers around the world. Those discussions, according to ten Broek, show the FSV competing well with alternative-material vehicles. He said the FSV will be built almost entirely of high-strength steel and advanced high-strength steel, provided by such WorldAutoSteel members as ArcelorMittal and Linz, Austria-based Voestalpine AG.

He said the FSV also will use an increasing amount of gigapascal ultra-high-tensile-strength steel, such as the grade Nissan Motor Co. Ltd. recently announced it will use in as much as 25 percent of the vehicle parts installed in its new production models beginning this year. The Yokohama, Japan-based automaker hopes to reduce weight by as much as 15 percent in new models by employing the gigapascal steel grade.

WorldAutoSteel continues to work closely with its steel and automotive members, regulators and academia on life-cycle analysis (LCA) and emissions regulations, ten Broek said. “At all times, our initiatives will be aligned with current car industry LCA practice.”

The success of the FSV as a commercial venture will depend on how well the steel industry and automotive industry manage to integrate their supply chain, said ten Broek, suggesting that such integration may well happen first in North America.


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